Of course, everyone knows that China -- like all countries --
manipulates its currency, but these things are shrouded in
theater and politics and nuanced language, but the upshot is that
it would apparently be a big deal if the Treasury actually made
such a call.

Well, leading figures in the US are going to put as much pressure
on Geithner to do so as they can.

What's most interesting about the column isn't his call for China
to let the Yuan rise in value, that's old, but his argument that
the US has nothing to fear from China.

It’s true that if China dumped its U.S. assets the value of the
dollar would fall against other major currencies, such as the
euro. But that would be a good thing for the United States, since
it would make our goods more competitive and reduce our trade
deficit. On the other hand, it would be a bad thing for China,
which would suffer large losses on its dollar holdings.
In short, right now America
has China over a barrel, not the other way
around.

Bold and refreshing!

Meanwhile, while Krugman fights the intellectual battle in the
media,
NY Senator Chuck Schumer is prepared to go to take action in
Congress. Word is that Schumer is set to introduce
legislation that would go after China over manipulation, and it
may resemble a bill he proposed in 2005 to slap huge tariffs on
imports. That didn't pass, but it sent a message.